Amazon to cut 18,000 roles in expanded layoff

Amazon is planning to cut more than 18,000 jobs as part of a reduction that began in late 2022, and is extending into the new year.

The number of layoffs, which was shared in a memo posted publicly by the company, represents additional eliminated positions beyond what was initially shared in 2022. In November, the reported total of the layoff was 10,000 positions, but Jassy wrote at the time that reviews were still ongoing.

On Wednesday, Jassy wrote that the review “has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years.”

“These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles,” Jassy wrote. “Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year.”

The layoffs will mostly affect Amazon Stores, which encompasses ecommerce and physical retail, as well as the division known as People Experience and Technology, which encompasses people ops and culture functions.

Jassy wrote that the layoffs will begin on January 18. The company had planned to communicate all of this following communication with employees, but news of the additional layoffs was leaked to the Wall Street Journal, prompting the official word to be delivered sooner.

The cuts come as Amazon continues to recalibrate following the COVID-19 pandemic. Prompted by a spike in ecommerce demand, the company massively expanded its logistics network and hired rapidly over 2020-21. But by April of 2022, the company said it had too much capacity in its network. Amazon has since engaged in belt-tightening, including making cuts to certain future-facing tech projects like home delivery robots and to its devices team. This week, Amazon also disclosed that it secured an $8 billion loan, to be used for general expenses this year.

The layoffs come after the company communicated uncertainty about its prospects heading into the recently-completed fourth quarter and the holiday shopping season. While Amazon last week said it had a record holiday shopping season and shared that 60% of items purchased were from third-party sellers, it has yet to release numbers showing overall results.

Amazon is not the only company that provides the tech infrastructure of ecommerce to make layoffs in recent months, as Meta, Shopify and Stripe have also let go of large numbers of employees. But Amazon's planned number of employees is now the highest so far of this wave.

On Wednesday, Salesforce, which provides ecommerce tools to brands and retailers through Commerce Cloud as part of a wider CRM business, said it would lay off 10% of its workforce. That’s about 8,000 employees, the New York Times reports.

“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” CEO Marc Benioff wrote in a memo to employees.

The convergence of inflation, interest rates and consumer shifts back to pre-pandemic preferences for experiences and in-person shopping created a difficult environment for tech companies that saw the biggest rise during pandemic years that saw demand for goods and digital adoption explode like never before. Wednesday’s layoffs are a sign that the fallout will continue in 2023.